Energy Outlook Oman Special Edition 2013

Pioneering Days

BY SEAN EVERS, MANAGING PARTNER, GULF INTELLIGENCE

July-01-2013

Oman has been widely credited with having pioneered enhanced oil recovery in the Middle East, introducing techniques such as miscible gas injection, steam injection and polymer flooding to stem and reverse a decline in domestic oil output.

The sultanate’s pioneering spirit has also been reflected in maintaining the long-established partnership of Oman’s national oil company PDO with international oil major Shell, which owns a 34% stake in the incumbent. In a region, where national oil companies essentially control all the hydrocarbon resources, Oman’s NOC-IOC partnership stands out, also because it has been an important driving force behind the success of the country’s EOR rollout.More of that pioneering spirit will be needed going forward. Like other countries in the region, Oman has to reduce its dependence on hydrocarbon income and diversify its economy.For that to happen it needs both a domestic push towards creating more value domestically, for example by developing more downstream industries, and bringing all key stakeholders—local and international—together to support the creation of a qualified and skilled Omani labor force that can be absorbed by an expanding economy.Equally important, and probably most sensitive, will be the introduction of measures aimed at cutting back on high energy subsidies, which have led demand to spiral and contributed to a domestic natural gas shortage. The days for pioneers are far from over in Oman.